New EC rules: Quotas for Netflix, Prime

The European Commission has proposed an update of EU audiovisual rules to create a fairer environment for all players, promote European films, protect children and tackle hate speech better, as well as presenting a new approach to online platforms. The proposals are part of a three-pronged plan to boost e-commerce by tackling geoblocking, making cross-border parcel delivery more affordable and efficient and promoting customer trust through better protection and enforcement, which the EC describes as “an important step” towards a Digital Single Market.

Andrus Ansip, Vice-President for the Digital Single Market, said: “All too often people are blocked from accessing the best offers when shopping online or decide not to buy cross-border because the delivery prices are too high or they are worried about how to claim their rights if something goes wrong. We want to solve the problems that are preventing consumers and businesses from fully enjoying the opportunities of buying and selling products and services online. We also want online platforms and the audiovisual and creative sectors to be powerhouses in the digital economy, not weigh them down with unnecessary rules. They need the certainty of a modern and fair legal environment: that is what we are providing today.”

In presenting an updated Audiovisual Media Services Directive (AVMSD); the common rules which have governed audiovisual media, ensured cultural diversity and the free circulation of content in the EU for almost 30 years, the EC notes that nowadays, viewers do not only watch video content via their TV channels but also increasingly via video-on-demand services (such as Netflix and MUBI) and video-sharing platforms (such as YouTube and Dailymotion). This is why the Commission wants to achieve a better balance of the rules which today apply to traditional broadcasters, video-on-demand providers and video-sharing platforms, especially when it comes to protecting children. The revised AVMSD also strengthens the promotion of European cultural diversity, ensures the independence of audiovisual regulators and gives more flexibility to broadcasters over advertising.

This proposal reflects the new approach of the Commission towards online platforms – like online marketplaces, search engines, payment systems, social media, video and content-sharing sites. Since the launch of the Digital Single Market strategy in May 2015, the Commission has undertaken a comprehensive assessment of the social and economic role of these new players. Today the Commission concluded that a ‘one-size-fits-all’ approach was not appropriate for consumers to benefit from the opportunities and for the rules to meet the different challenges posed by the very diverse types of online platforms. Based on this approach, the Commission will look at each area where it can act, from telecoms to copyright rules, to address any specific problems in a future-proof way for all market players.

Ansip said: “I want online platforms and the audiovisual and creative sectors to be powerhouses in the digital economy, not weigh them down with unnecessary rules. They need the certainty of a modern and fair legal environment: that is what we are providing today. This means not changing existing rules that work, such as those related to the liability of online service providers. It also means deregulating where necessary for traditional sectors like broadcasting, or extending certain obligations to platforms and other digital players to improve user protection and to reach a level-playing field.”

Günther H. Oettinger, Commissioner for the Digital Economy and Society, said: “The way we watch TV or videos may have changed, but our values don’t. With these new rules, we will uphold media pluralism, the independence of audiovisual regulators and will make sure incitement to hatred will have no room on video-sharing platforms. We also want to ensure a level-playing field, responsible behaviour, trust and fairness in the online platforms environment, our today’s Communication sets out our vision for that.”

A media framework for the 21st century

The Commission has conducted an evaluation of the 2010 Audiovisual Media Services Directive (AVMSD) and, on this basis, proposed:

Responsible video-sharing platforms: Platforms which organise and tag a large quantity of videos will have to protect minors from harmful content (such as pornography and violence) and protect all citizens from incitement to hatred. Detailed measures include tools for users to report and flag harmful content, age verification or parental control systems. To make sure the measures are future-proof and effective, the Commission will invite all video-sharing platforms to work within the Alliance to better protect minors online, with an aim to come up with a code of conduct for the industry. On top of industry self-regulation, national audiovisual regulators will have the power to enforce the rules, which depending on national legislation, can also lead to fines.

A stronger role for audiovisual regulators: The Directive will now ensure that regulatory authorities are truly independent from governments and industry, and can play their role best: ensure that audiovisual media act in the interest of viewers. The role of the European Regulators Group for Audiovisual Media Services (ERGA), composed of all 28 national audiovisual regulators, will be set out in EU legislation. ERGA will assess co-regulatory codes of conduct and advise the European Commission.

More European creativity: Currently, European TV broadcasters invest around 20 per cent of their revenues in original content and on-demand providers less than 1 per cent. The Commission wants TV broadcasters to continue to dedicate at least half of viewing time to European works and will oblige on-demand providers to ensure at least 20 per cent share of European content in their catalogues. The proposal also clarifies that Member States are able to ask on-demand services available in their country to contribute financially to Europeans works.

More flexibility for TV broadcasters: Viewers annoyed by too many TV advertisements can switch to online ad-free offerings which did not exist a decade ago. The revised audiovisual rules respond to this, and other new realities. The revised Directive gives broadcasters more flexibility as to when ads can be shown – the overall limit of 20 per cent of broadcasting time is maintained between 7 am and 11 pm, but instead of the current 12 minutes per hour, broadcasters can choose more freely when to show ads throughout the day. Broadcasters and on-demand providers will also have greater flexibility to use product placement and sponsorship, while keeping viewers informed.

These different measures are expected to have a positive economic impact for media service providers – mainly TV broadcasters – and increase their capacity to invest in audiovisual content. This is important for the competitiveness of the EU audiovisual industry.

Online platforms: opportunities and challenges for Europe

Online platforms play a key role in innovation and growth in the Digital Single Market. They have revolutionised access to information and have connected buyers and sellers in a better and more efficient way. EU action is needed to set the right environment to attract, retain and grow new online platforms innovators.

The Commission outlined a targeted, principles-based approach, to fix problems flagged by respondents to the Commission’s public consultation during its year-long assessment of platforms. The Commission will support industry and stakeholder efforts for self- and co-regulation to ensure this approach remains flexible and up-to-date. The action areas include:

Comparable rules for comparable digital services: Comparable digital services should follow the same or similar rules and, where possible, the Commission should reduce the scope and extent of existing regulation. The Commission will apply these principles in- ongoing reviews of EU telecoms legislation, and of the e-Privacy Directive, for example when considering whether rules on confidentiality should apply to providers of online communications services as well as traditional telecoms companies.

An obligation for online platforms to behave responsibly: The existing intermediary liability regime, set out in the e-Commerce Directive should be maintained. Specific problems will be addressed through targeted instruments, such as audiovisual or copyright rules, or enhanced voluntary efforts by industry.
For example, the Commission is working intensely with major online platforms on a code of conduct on combatting hate speech online and will present the results in the coming weeks.

Trust is a must: Cross-border enforcement cooperation will ensure that platforms fulfil their obligations regarding consumer rights, for example to clearly indicate sponsored search results. The Commission will also encourage industry to step-up voluntary efforts to tackle practices such as fake or misleading online reviews. The Commission will encourage online platforms to recognise different kinds of secure electronic identifications (eID) which offer the same reassurance as their own eID systems.

Open markets for a data-driven economy: The free flow of data initiative scheduled for the end of 2016 will facilitate switching and portability of data among different online platforms and cloud computing services.

A fair and innovation-friendly business environment: The Commission will carry out a fact-finding exercise into issues raised in the public consultation by businesses and suppliers who directly interact with platforms. These include, for example, concerns over unfair terms and conditions, in particular for access to important databases, market access and general lack of transparency. On this basis, the Commission will determine, by spring 2017, whether additional EU action in this area is needed.

In its forthcoming European agenda for the collaborative economy, the Commission will also provide guidance on applicable EU legislation and make recommendations for Member States.